Seocho 2010Ch237 (Law No. 9.30, 2010)

Any inevitable reason not deemed land for non-business use shall not be deemed land;

The fact that a factory was not constructed on land, etc. because an urban planning on the factory site was not implemented, it cannot be deemed as a case where it is not deemed a non-business land due to an unavoidable reason, and it is difficult to recognize the fact that the factory site had resided in an

2010Gudan27205 Revocation of Disposition of Imposing capital gains tax

Republic of South Asia XX

Head of the tax office;

July 13, 2011

August 17, 2011

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s disposition of imposing KRW 117,898,080 on the Plaintiff on December 7, 2009 shall be revoked.

1. Details of the disposition;

A. From November 29, 2001, the Plaintiff acquired and held the ownership of the XX Eup 000-0 land in Pakistan. On November 29, 2007, 817 square meters out of the above land were expropriated from the Si of Pakistan, and on November 30, 2007, the registration of division was completed with regard to the above 817 square meters in Pakistan, as of November 30, 2007, with regard to the above 817 square meters in Pakistan, the registration was completed on November 30, 2007.

B. The Plaintiff did not report the transfer income tax after the transfer of the instant land, and the Defendant deemed that the instant land constitutes non-business land, thereby imposing KRW 117,898,080 on December 7, 2009 and notifying the Plaintiff on December 7, 2009 by applying the heavy tax rate of 60%.

[Ground of Recognition] Facts without dispute, Gap evidence 1, 5, 9, 10, and Eul evidence 1 to 3

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) The Plaintiff obtained the approval of the establishment of a factory from the Si of Pakistan in order to relocate the factory after having been subject to the determination of the urban management plan in 1978 with the factory site of the Seoul Jongno-gu Seoul Jongno-gu Seoul Metropolitan Government in order to move the factory to the square in 1978. The Plaintiff planned to build a factory in Jongno-gu Seoul Metropolitan Government as compensation for expropriation of the factory site, but failed to construct a factory until now since urban planning was not implemented. Considering that the Jongno-gu urban planning was not implemented and the land was expropriated for the public interest project, the instant land constitutes “land which is not deemed non-business land” under Article 168-14(1)4 of the Enforcement Decree of the Income Tax Act or Article 168-14(3)5 of the same Act, and otherwise reported.

The instant disposition is unlawful.

(2) Article 69(1) of the Restriction of Special Taxation Act provides that the tax amount equivalent to 100/100 of the transfer income tax on the income accruing from the transfer of the land prescribed by the Presidential Decree among the land which was cultivated directly by the “resident prescribed by the Presidential Decree residing in the location of the farmland” for not less than eight years (including the objects of non-taxation, reduction and exemption, and small collection) shall be reduced or exempted. Article 66(1) of the Enforcement Decree of the same Act provides that the “resident living in the location of the farmland prescribed by the Presidential Decree” lists the residents living in the area within 20 kilometers in a straight line from the relevant farmland, and since the Plaintiff resided in the area within 20 kilometers in a straight line from the instant land, the tax amount shall be reduced or exempted pursuant to the

(3) Article 77 of the Restriction of Special Taxation Act provides that capital gains tax shall be reduced by 10/100 on the income accruing from the expropriation of land, etc. under the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor and the Act on the Acquisition of Land, etc. for Public Works and the Compensation Therefor. As such, the disposition imposing capital gains tax on KRW 11,789,808

(b) Related statutes;

It is as shown in the attached Form.

C. Determination

The plaintiff's claim shall be judged in the order of the plaintiff's argument.

(1) In order to fall under Article 168-14(1)3 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 20618 of Feb. 22, 2008; hereinafter referred to as the "Enforcement Decree"), the land of this case shall fall under any of Article 83-5(1) and (1) through (12) of the former Enforcement Rule of the Income Tax Act (amended by Ordinance of the Ministry of Finance and Economy No. 15 of Apr. 29, 2008; hereinafter referred to as the "Enforcement Rule of the Income Tax Act"), and to fall under Article 168-14(3)5 of the Enforcement Rule, Article 83-5(3)1 or 2 of the Enforcement Rule shall fall under any of Article 168-14(3)1 or 2 of the Enforcement Rule. As alleged by the plaintiff, the land of this case was not constructed on the land of Jongno-gu Seoul Factory Site due to its lack of urban planning.

(2) Article 69 (1) of the former Restriction of Special Taxation Act (amended by Act No. 8827 of Dec. 31, 2007; hereinafter the same) provides that "the resident who resides in the location of farmland shall be exempted from the transfer income tax on income accruing from the transfer of self-defined farmland for not less than eight years." Article 66 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 20620 of Feb. 22, 2008) provides that "the resident who resides in the location of farmland as prescribed by Presidential Decree" in the main sentence of Article 69 (1) of the same Act means the person who resides in the area falling under any of the following subparagraphs for not less than eight years (including the area which falls under the relevant area at the time of commencement of cultivation but does not fall under it due to the reorganization of administrative district), and subparagraph 1 provides that "the city, Gun, and Gun (referring to the dental district; hereafter the same shall apply in this paragraph) adjacent to the area within 20 kilometers."

In addition, there is no assertion or proof as to the fact that the Plaintiff resided in the area of Pakistan-si where the land of this case is located or in the area adjacent thereto (According to the statement in subparagraph 6 of this paragraph, the Plaintiff appears to have resided in the Jongno-gu Seoul AAdong since 1984), and the Plaintiff’s assertion on the above part is without merit.

(3) According to the statement in Eul evidence No. 1, since the defendant had already reduced or exempted the tax amount equivalent to 10/100 of the transfer income tax under Article 77(1) of the former Restriction of Special Taxation Act at the time of the disposition of this case, the plaintiff's above part of the plaintiff's assertion on a different premise is without merit.

(4) Therefore, the instant disposition is lawful, and all of the Plaintiff’s arguments are without merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit, and it is so decided as per Disposition.